Four Convenience Fees to Avoid

In day-to-day life, most people do not take the time to analyze the many ways convenience fees affect them. If you are spending money every month on these fees, it is taking a chunk out of your wallet. Here are the top four convenience fees to avoid and how to do it.

1. Other Bank ATM Fees

When you need cash fast, you may be tempted to withdraw money from the closest ATM. After all, most ATMs are connected to the same network and allow customers to withdraw funds from accounts at member banks. Often, however, you are charged a fee for the usage of an ATM from a bank other than your own. This fee can range from $1 to $4. Privately-owned ATMs often charge the highest fees but bank ATMs can be expensive as well. To make the financial pain worse, you may also be charged a fee by your own bank for negotiating the transaction with another bank's ATM.

How to avoid this fee: Plan your cash needs upfront. Have small amounts of cash in your wallet ahead of time for small expenses and to use at stores that do not take credit or debit cards.

2. Paycheck Cashing

This loan service can financially damage a customer who is trying to dig out of a mound of debt or who desperately needs the money for other purposes. Basically, a paycheck cashing service loans you money against your next paycheck. When you get paid, they take back the loaned funds plus a hefty fee that is usually around 3-5% of the loan. While that might not sound like a lot of money, if the loan is for two weeks, it is the equivalent of 78-130% annually. Many customers end up borrowing against the next paycheck to pay back the existing payday loan and fall into a very dangerous downward cycle.

How to avoid this fee: This can be a difficult one for those struggling to pay their bills, however, careful budgeting and planning the timing of cash flows can help avoid the need to visit a paycheck cashing service.

3. Credit Card Bill Payment

Many utility companies offer their customers the option to pay their monthly bill by credit card. Most companies opt to offer the service through a third party provider rather than do it themselves. This service often comes with a hefty fee attached, in the range of $4-6 per transaction. This can add up substantially if you choose to pay all your bills by credit card every month.

How to avoid this fee: Choose a bill payment method that does not incur a fee. Many companies will allow you to pay with your bank account number rather than a credit card number for free. You can also set up automatic withdrawals so that you know the money is coming out on time. Many people use the credit card pay because they are paying right on the deadline and trying to avoid late fees. Careful expense tracking and budgeting will help with paying bills earlier and avoiding the fees altogether.

4. Coin Counting Machines

These machines are popping up everywhere: in stores, malls, and on street corners. Coin counting machines allow you to take a bag or bucket of loose change and convert it to paper money or into vouchers that can be redeemed at the stores who are hosting the machines. The fee for this service can be close to 10% of the amount deposited which can take a chunk out of your savings.

How to avoid this fee: Roll your own coins! It's not difficult. Coin wrappers can be purchased at any office supply store and many banks will issue you some for free. Get the kids involved and make coin rolling a family event. Once all of your coins are wrapped, simply take them to your bank where you can deposit or exchange them for free.